Bill Gates Talks Philanthropy, Microsoft, and Taxes | DealBook

Thank you. Thank you so much for being here. I'm thrilled to have Bill Gates with us this afternoon. I've wanted to do this with you for quite some time. And when the Great privileges my life is a journalist has actually been getting to know Bill over probably the last decade now and Warren Buffett together and every time that we spend time together, I learned so much and I know so many if you are going to learn so much from Bill. I don't think it's hyperbole to say that Bill Gates is singularly. I would argue the most consequential individual of Our Generation. I mean

What he did in the private sector Microsoft changed the face of culture and how we live today and what he is doing with his foundation is changing the world. I just want to give you one stats since 2002 and the one when the gates have a huge role in all of this more than 32 million lives have been saved and hundreds of millions of people have received prevention treatment care services for HIV TB and malaria as a function of the work that he's been doing and when you think about 32 million lives, that's something that's very very difficult for anybody else in the world have

done. So thank you for that Bill Gates. We've been talking about so much today and I want to talk with Bill about all of that. We're going to talk about his philanthropy the bill in the Bill and Melinda Gates Foundation Warren Buffett. It's course has instructed his entire Fortune to them and that is a remarkable thing as well. I want to talk about where we are the wealth tax debate around philanthropy in this country and the world of technology and the priorities of the foundation because I think that they are shifting to a

new area run time change which I think is fascinating you historically actually have been in favor of a while text. EBay highest state tax of Ohio State Tax. Yeah, so there is now on the table Elizabeth Warren has a true wealth tax on the table 6% for billionaires. He would cost you. I believe close to 6 billion dollars. Annually. If you had to pay it on top of what you already pay think of all of this while I think the spam of the two parties in terms of where they are and Taxation has never been so broad you have in a one-party

reducing corporate taxes in a still supporting carried interest taxes on capital or way way less than on labor and the estate tax they're still talking about. Hey, that's a bad thing a dead person should pay first their wealth and you should reduce these accumulations. Well, and now on the other side, If you say it's 6% well packs to believe something in the middle. And I I I I think you can make the estate tax higher. You could even take people of sat on a few games for

NSA 10 years and say okay back there. You should created taxation event there. I think just by treating Capital Income the same as Libra, very long distance one super Progressive. You do need to come with more transparency the fact that you can through trust like structures hide lots of beneficial ownership and get away with a lot bullets at the corporate level and the individual level we can do a lot better there. So I'm impressed that there are few

candidates to go even beyond my view and I do think of you text too much to do wrist the You know Capital formation Innovation u.s. Is the desirable place to do Innovative companies. I do think you risk that a prime beneficiary of the existing system. But you know, I'd love to somebody to find a middle ground approach because the government's role in healthcare and better education. The government does need more resources than it has today. It's what we do. Do you make the

tax on Capital the same as labor you go back to the estate tax that we used to have doing something like the 10-year thing in a words super large Fortune. The debate fortunes are not as nice as a return on the big fortunes are the return on creating companies that achieve very strong positions particularly in the technology industry. Where you get these super big numbers and So they are no I paid over ten billion in taxes. I paid more than anyone in taxes, but I

why do you know if I'd had to pay 20 billion? That's fine. But you know when you say I should pay a hundred billion then I'm starting to do a little math about what I have left over. Sorry. I'm just kidding. You really want the incentive system to be there and you can go a long ways without threatening that have you ever talked about or even be willing to sit down with somebody, you know who has large amounts of money. You've been politely say public about your

misgivings about our current president. If Elizabeth Warren were the other candidate what would you do? You know, I am not going to make political declarations, but I do think no matter what policy somebody has in mind a professional approach is even as much as I disagree with some of the policy things that are out there. I do think a professional approach to the office. Whoever I decide would have the more professional approach in the current situation probably will way it's the thing that always the most

and you know, I hope it more professional candidate is an electable candidate. Okay. We will I think we can take away something from that. Jeopardy question actually this has to do with with taxes though and it has to do with philanthropy and one of the great things include you are an example of it is you've given away your your vast Fortune 50 billion dollars so far we could say and another fifty billion dollars is in the foundation itself about the idea that vast Fortunes in this country are able to be moved

from the private sector into a foundation without paying tax. So the shares of Microsoft that you were able to generate the shares that they will generate capital gains on the step up on that and so the US taxpayer the US citizen it's not clear that they are beneficiaries of Of your success to the extent you believe that they should be what do you think of that? Will you will you ever be in favor of taxing philanthropy in that way of some sort raise taxes

including making some gift to foundations more taxed. We have a lot of room either in terms of increasing philanthropy or destroyed Jean informing the business. We're not close to the Limit. I mean there was a time where we had 70% taxation rates now in a you do get some people wasting a lot of time looking for tax loopholes if you're not careful there, but we're not at the limit on that in my case. I had because the amount of money I put in my deduction expired and you can only take 30% of adjusted gross income and so 90% of my potential.

Didn't get used the way Warren does it he doesn't have much personal income. So he is a gift yearly gift which is worth over two and a half billion in whatever way to pay a fair bit more and it is important to separate out. The question of should rich people pay more taxes answers. She asked for whatever remainder of money. They have left over. I do think he's a good thing. I think it plays that 2% of the economy plays a role. Neither. The private sector of the government

are able to do in terms of various Innovative approach or nutrition or New models of Education through things like charter schools. So I I stick up for the even once you change the tax system the remainder. It's okay in my view tab lamp. What do you think of this large right there? But underneath all of this you hear people who stayed there shouldn't be billionaires in two sided if you really understand what this wealth taxes about. In fact that one of our officers at the New York Times described as a

cigarette tax with the ultimate goal of there being less of it. Maybe I'm just to buy us to think that if you create a company that super valuable that at least some part of that you should be able to have a little bit for consumption and and hopefully the balance to do philanthropic things. Now, there are people who think the politically those fortunes being used for things like lobbying. Give me the candidates that that's tilting the Plainfield in of the last election was not or at least the presidential piece was not a money driven phenomena

the candidate who spent more did not did not win in that case. But I agree the First Amendment wasn't designed at a time when rich people could essentially by this big megaphone. I choose not to participate in political donations their times that might feel tempting to do so and and are there other people who choose to do so, but I just don't want to grab that gigantic megaphone. Let me ask again about this in this is this is the author of winner-takes-all Union of this book. I'm talking about a

gigantic piles of money. This is this is people with great wealth and if tricked politicians and the media into giving them an exceptionally loud voice and policy discussion there still a question should any one person however, amazing have that much say over public life. We have a democracy and certainly the democracy is not electing all people that I vote for and I do think it's okay to talk to experts brexit. There was a person who said in a we've had enough of experts. I do think that if you want to talk about software Innovation that at least listening to the ideas

of people have been There isn't such a bad thing. I mean you could literally say that we can't talk to politicians. If you really think that sharing our opinions about say climate change or malaria malnutrition or Charter Schools, you know, if that's really bad this group dogs have more free time. They have proven that you know, their energetic and involved some things and often they get into a face their life like Steve Ward from is putting water up his energy and thought into very creative and I think what will be

positively impact philanthropy and we just asking who I think it's still here. I hope they be tough question in this has to do with the idea that philanthropy today often feels or poor people would argue that the credentialize is people Prudential I serve the people there have been a number of reports including the New York Times and you know where I'm going with this about a handful of meetings. Not more that you took with Jeffrey Epstein after he I had been convicted as a sexual offender. And I know that you have said it was a mistake and that it was something that you

wish you had not done in retrospect, but I'm curious now with with hindsight since those stories came out what you think the the lesson of that was and when you think about that as an experienced and the kid is credentialize in idea. You know any people with a reputation spending time with him probably gave him an undeserved send subpoena being back in the mainstream or not being a prion. So my doing that was a mistake if I go about trying to raise money for Global Health, which every extra

thousand dollars we raise for that, save one life. And so we are extremely resource limited. We can buy more bed mats. We can buy more vaccines in that case. You know, I made a mistake in judgment that I thought that the discussions with lead literally to billions of dollars Going Global how it turned out that was a bad judgment. That was Mirage none of that money ever appeared and I gave him some benefit by the Association. So I and I made it doubly wrong mistake there in general when we have something like the giving pledge. We it is

tricky when Somebody's wants to sign up and you're likely that your fortune is really a question Fortune. There's some countries that we just haven't done any recruiting in at all because we're not in a position to really make you because you looking you see the corruption in properly and I too bad we probably will at some point accept someone into giving punch level turn out that their Fortune is it is a disreputable Fortune. It is people brought into plant be it's there is a risk that you'll make a mistake

and we have a New York Times magazine was the cover. It was an education piece remember and we were walking down the street on 57th Street. And we maybe maybe walked half a block and you were surrounded and there was a moment where I thought when we were walking that you had forgotten that you were Bill Gates. Maybe just just stick with you for a second and I just want I wonder just in your life, you know, you are the equivalent in some ways of the head of state these days. I'm down to the minute. There's thousands of people around

you and I are on a very personal level when you think about your own life how how you can be Bill Gates out there in the world. And then how you can be the Bill Gates that you are in private. And and how do you think about that and how you how you baby even how you can find some space between the two part of it is that you limit the amount of time you go out and you have people around you like Warren Buffett or my wife Melinda who you know if I come back and I look

like I do the dishes I have kid of you will absolutely I couldn't even some technology things that use that they find it amazing what they are all I've got to check Instagram because my youngest daughter likes to communicate their I have to check WhatsApp because another child likes to communicate to have to do all this but I forgot to do it then it's like wow, you're not paying attention my life. I like to read email and it bugs them that I'm so email Centric and then I'm in a very large green

oriented. I'm going out and I'm just take like today today. I got to me top scientists working on solving malnutrition obesity. I got top scientists working on Saturday in which for some diseases of the poor like sickle-cell or HIV cure will make a big difference when I go out in public these interactions. How can we drive things forward to the idea? I give up some privacy settings the deal I don't go into a bar all that much because even more I stay away.

I want to talk about the foundation but you just mentioned technology. So let me just ask you about it cuz we had making delrahim earlier here today and we can talk about antitrust and you of course live through the case. We did Marcus from Facebook is here today curious how you see these cases or or this question about big Tech today in this idea that some of these companies giving their platform can advantage or disadvantage their products over others given what to place and when you sort of look at look of a half with Microsoft Netscape years ago, I'm not sure

whether the only tool being breaking company. Stop is either in a valid the way the laws written or is likely is probably more fruitful to look at the network effects that you got that say if you send a friend's message to somebody if they're not on that particular Network, it can't get to them in a few shopping on Amazon. They have your credit card. They have your shipping address. They have your history shouldn't be should there be a regulation like there is in Europe for the financial

institutions where if you want to share all of your information about what you doing think one would think to so you can get them to bid to give you a loan but that's required that the network effects that you might have been locked into the One Bank the these interoperability rules. Are things about technology companies that it's worth looking at what the policy should be? I'm not sure but believe me there's another one. I didn't think Microsoft to be broken up. I argued against it and

I wouldn't wish that on anyone. Do you think it made the technology environment more competitive everyone else? Can you say that if they want. It's not true to me and or weather was a view that that may be the case and maybe it's the case itself night of taking the company's off the ball around mobile consumer thing. There's no doubt that the antitrust lawsuit was bad for Microsoft and if we would have been more focused on creating the Bangla operating system and sunset of using Android today. You would be using Windows mobile.

I was just too distracted. I screwed that up because of the distraction and you know, we were just three months too late with the release of Motorola would have used on a phone. So yes, it's a winner-take-all game that is for sure that you know, and I can hear that. I want to be retired as soon and that one is less in I am disappointed that Windows mobile didn't succeed. But in terms of my own wife, you know, even though it was a very painful thing because I got

very personally involved in the defense of the company. The fact that I retired earlier probably not was good for me because I got down the learning curve on the foundation of the foundation and only 99% very very well right now that's taking place on social media. Been targeting in that domain essentially targeting should not be allowed to not be allowed not be allowed. But would you do think that the content should be policed or not? I wish I wish I thought that was such a thing that could be done. But no, I I

actually disagree with targeting but I disagree with people who think that a fact checking against those things. Yes. There are extreme cases. Somebody can come up with like Holocaust denial or there is nothing but no no private company can or should make those judgments and it's the pardoning where you don't see the hay tab. That's just appeal to that one person in this really screwed this thing up according to me. Microsoft to do today, what do you think of that

as an individual to really feel like you're responsible for the success of the company to actually go and sort Short Circuit the government really are making mistakes that you're bored can outvote you that you literally can't replace the board the next day. I mean, I really think you were at risk of that. I didn't want I felt enough responsibility for making sure Microsoft succeeded that I didn't want to be the dictator of Microsoft. Okay, final text Tech oriented question cuz I know it is and then we talked about the foundation which is China,

but I'm curious where you land on Huawei. And this idea that China is is building of a technology that ultimately is going to compete if not overtake. What we're doing here is good to Chinese doing Innovative technology. And anybody who thinks we should try and stop that is a bit unrealistic and services should be subject to an objective test is it? Outdoor not follow the rules that everything that comes from China is bad if it tries to come to the u.s. For everything from us like jet engine software in a you name it is bad that is one crazy approach to

trying to take advantage of innovation and really have the two countries mutually dependent enough that we minimize the chance of ever going to war with each other. We should take advantage of their climate change Innovations their medical Innovations, just like they should take advantage of ours and the idea that we just eat you can we were questioned about those windows have some NSA thing in it. We gave two governments the window source code and they could look at it. They could compare open us that made them while we can do the same thing.

But if you if you ever want a government doesn't think so at the moment. How can you tell do you want them to buy any of our products or not? And what about Chinese employees? If you're so paranoid about the being written by you know, somebody whose grandmother was Chinese, I mean, I mean, there are people born in foreign countries who write software honest-to-god. Let me give it the conversation to the foundation because you're doing something very interesting to me, which is that I don't want to say that you're pivoting but I think there's been a shift for you, which is that

you focused thus far on global health. And by the way, Nick Christoph migrate colleague was one of the great inspiration to a column that you wrote for some of the work that you've done. But what I want to ask you about is you seem to be shifting at your money resources thought and efforts for the climate and I want understand when that happened for you what the change was and how you see the challenge come out next summer. About what a climate solution would look like and you know, I've been pleased at the interest level and climate has pretty

dramatically over the last two or three years. It was about 10 years ago. I had some professors come to me for five times a year. I bring other experts like to learn. Okay how good are the models? What are the negative effects? What is the uncertainty? What are the positive feedback cycle? And so I've been on this morning for the Nats the whole reason I started this nuclear power was not to make money. Is this really tough problem to change the whole industrial infrastructure issues,

are you doing work to reduce the emissions which is currently 53 billing comes here. And everybody agrees. You've got to get that pretty close to Zero by 2050. I do that outside the foundation through investments in private companies in a people who do geothermal offshore wind electric buses. I even have the bench for fun that 20 other people have supported to in Destiny's climate-related Innovations. The other climb thing you have to do is call that the people will

still be affected because the temperature is going to go up somewhere between 2 degrees 3 degrees centigrade in 4 degrees Centigrade hard to say what we'll have to do a soup. Super good job to get anywhere near the poor farmer will have more failed crops. And so there that's for the foundation is trying to create seeds that can deal with the route that are more productive for the good years. They have buffer stock. So they're we're doing a lot of medication work a lot of the work we would do any way of improving nutrition and proven agricultural output and the weather is already very

uncertain. It just gets worse and in a in a negative. Why do you think political power will ever be something that is will be a completely viable solution for the yes, which means there's like a 30% chance. Nuclear reactors actually have a better safety record than any other source of electricity. They are not the problem is the only case where you have radiation released killing people call Chelsea lot of people per kilowatt-hour it's the safest but I don't care about that those reactors can

high pressure and they need human sitting there pushing buttons. You can design a reactor that by multiple physics principles that the radioactive material never leaves the the reactor you have in a cheap pool in the low pressure. And so people at least should be open-minded that annexed and racial reactor can have far better economics far better safe. In an old pillow operation always problem, but we need lots of Innovations to solve climate change if we have certain other breakthroughs like an energy storage. You can actually create a zero

Mission grip without no clear, but it's way more straightforward. It's way less expensive. If a meaningful part of the new generation reactor, what's the coolest technology or thing that makes you the most optimistic is the most amazing is that part of the countries have such a pipe time is that over 40% of the kids there never develop the either their physical body their brain because of malnourishment from an early age they have and I'm very low IQ, very low physical

capacity. And so and after that's over 40% of the kids and it's never been understood. Why it's not like starvation they are getting enough feed their twin brother is on their growth path and they're not we've discovered the foundation's researchers weave that you get inflammation in your stomach that relates to the bacterial species the so-called microbiome and so we are in Trials right now with very low-cost things that can get rid of that information than allow the kids to get back on their growth top and so not only will less kids die because kids on their

growth path or 1/3 is likely to die from pneumonia or diarrhea malaria, but also as the kids survive their ability to learn and to work every society's benefit from the fact that the food in put you got more and more protein and Celeste kids were having malnourishment here. We can short-circuit that even very poor countries. We can essentially get rid of malnutrition. I mean I get to work a lot of cool things that has the most cool thing. I'm working on. How close are I know you were so close on polio malaria

that we're just at the beginning of polio. Hopefully, we're not many years away from getting so cases. We have two countries Pakistan and Afghanistan and I'm putting a lot of time into that because 02 magic number as long as there's cases in those two countries spread back. And so we have to keep vaccinating kids all around the world because they could go anywhere if we get to zero then you can stop vaccinating and you know, it's like smallpox the only disease ever eradicated. We don't spend any money on

treating people are vaccinated people because it's gone. Give me the address in space. your neighbor in Seattle like space life is so much more impactful. Never talk to Jeff about that likes Mars just likes artificial planets fiction, but I guess not as much as they did. Two final questions and one came from an audience members. I was walking back into your earlier today. They want to know would you ever run for president? No, never not interesting. Good at innovation

in a vacuum scientists weather is climate change real ID or malnutrition orchestrating the resources and then there's a breakthrough making sure it gets out all the kids in the world who needed this is this work that I do in partnership with Melinda and a great team that the foundation and many other co-founders. This is my life work. This is what I'm my current lights work. I am to careers and it will take all of the years. I have remaining to make big progress for example to get rid of malaria in to get child to death in poor countries so that it's not

any greater than in rich countries. That's the sort of equity goal less than 1% for children. Which today is still 5% on a global basis. That's the thing. All my remaining energy into before we did a video of you and and Warren Buffett you made that video for him. I always loved watching a video and that's why I wanted to show it to everybody but you need to tell us about this friendship and see you guys together. But the reason I ask is it's kind of a coincidence of Swords 2 of the wealthiest people

in the world become best friends, and I'm not sure it has anything to do with the money, but maybe I'm wrong even want to meet warm because I thought hate this guy buys and sells things and so he found imperfections in terms of markets. That's not that's a zero-sum game that is almost parasitic. That was my view before I met him. And he wasn't going to tell me about inventing something but then I meet him and I realized it everything he does is based on a

judging markets judging people judging how things work in a very deep way and so he asked me questions about Microsoft. Like why can't I VM Crush you in a second that is the world's most obvious question. Nobody's ever asked me before until I got to ask him about newspapers and retailers and in a good Investments bad Investments and how you know, how key. Although I realized we both although we come from different places where it's been even more fascinating in some unexpected ways. Then when we first became friends number of things more and I call each other. Oh my God.

What the hell we can talk forever because we're both trying to figure it out. Final question. What do you want to be remembered for? When all this is over. I want you to forget there was ever polio or malaria, but outside that pretty small group in a few really get rid of problems. Then you know, nobody ever has to think about it again.